Loans For Immigrants and Newcomers In Canada

Quick Links

1. A Quick Guide to Loans and Credit in Canada
2. Can You Get a Loan as an Immigrant in Canada?
3. Loans for Immigrants and Refugees
4. Interim Federal Health Program
5. Windmill Microlending - Loans for Career Success
6. Newcomer Loans and Financial Services from Big Financial Institutions
7. Other Types of Loans
8. How To Qualify for a Loan in Canada
9. Building Your Credit History in Canada
10. Frequently Asked Questions About Loans For Immigrants and Newcomers In Canada

A Quick Guide to Loans and Credit in Canada

Can You Get a Loan as an Immigrant in Canada?

As most traditional loans in Canada require a Canadian credit history, newcomers will struggle to access these products right away. However, that doesn't mean there are no options at all.

Given the large number of people moving to Canada every year, a multitude of programs have been created to cater to this growing demographic.

Loans for Immigrants and Refugees

Immigration Loans Program

The Immigration Loans Program (ILP) is offered by the federal government of Canada to help those who are moving or have recently moved to the country with some of the costs of their relocation. It's specifically for disadvantaged people, such as refugees and protected persons. Like mainstream loans, the entire loan amount must be paid back to the government over time, plus interest.

Transportation Loan

This loan covers costs related to getting to Canada - including transport, immigration fees, and International Organization for Migration (IOM) fees. Also included are some associated costs, such as accommodation while in transit, but there are exclusions too. You can't use this loan to pay for baggage fees, shipping of personal effects, pre-departure medical services, or the transport of animals - including family pets.

Assistance Loan

Once you're in Canada, you may be eligible for an Assistance Loan to help with the cost of settling into a new life; this loan can be used for rental deposits, utilities, food, clothing, household items, work-related tools, some other employment related expenses (such as certification fees), and other incidental expenses.

Right of Permanent Residence Fee Loan

The Right of Permanent Residence Fee (RPRF) loan is extremely specific - it is only to cover the cost of paperwork once your PR is approved. The RPRF is $515 per application. For more on RPRF loans and further information on seeking permanent residence, see here.

Interim Federal Health Program

Also offered by the federal government, the Interim Federal Health Program (IFHP) helps eligible people by providing limited, temporary health coverage, either in their home country, or once in Canada. Rules about who is covered are strict; you must be one of the following:

• resettled refugee

• refugee claimant

• protected person

• foreign national detained under the Immigration and Refugee Protection Act

• victim of human trafficking

• victim of family violence

• skilled refugee eligible under the Economic Mobility Pathways Pilot (EMPP)

• refugee selected for resettlement in Canada

Only basic healthcare costs are covered and to gain approval, you can't have use of any other healthcare insurance plan or program, public or private. This is another program that is intended to be a last resort; you can find more information about it here.

Windmill Microlending - Loans for Career Success

Windmill Microlending is a nationwide registered charity that offers affordable loans of up to $15,000 to skilled immigrants and refugees. The loans are intended to help newcomers pay for costs associated with career development and accessing appropriate employment, so that they can become financially successful. Many newcomers to Canada are underemployed given their past experience and training, and Windmill Microlending aims to help address this imbalance and improve long-term career success.

• Education and training programs of two years or less, including courses to help advance your career
• Fees for licensing and qualifying exams
• Living allowance to support you during your training, licensing, or relocation
• Credentials assessments, like ones from WES, ICAS, IQAS, or MIFI

• Travel expenses to take courses or exams not available in your area
• Books, course materials, and work equipment
• Professional association fees (to help with networking)
• English or French language training
• Relocation costs for employment

Windmill loans cannot be used to start a new business.

Getting approval for a loan from Windmill Microlending is tough; you must be:

1. An immigrant living in Canada on a permanent status (permanent residents, convention refugees, protected persons or Canadian citizens - with some exceptions for Quebec)
2. Internationally-trained
3. Educated to a post-secondary level outside of Canada and/or have a minimum of one year of post-secondary work experience before coming to Canada
4. Prepared with a Career Success Plan that requires funding
5. You must not have an undischarged bankruptcy or a consumer proposal that has been active for less than 6 months

These rules mean that Windmill Microlending loans are not accessible by international students, live-in caregivers or refugee claimants.

Newcomer Loans and Financial Services from Big Financial Institutions

Scotiabank StartRight Program

The sheer volume of new immigrants to Canada means that even the big banks are starting to cater to the needs of newcomers. Scotiabank was the first to do so with its StartRight and ScotiaRISE programs.

• Free banking for a year with the Preferred Package Chequing Account
• Unlimited no-fee international money transfers
• Free safety deposit box for a year
• Approving newcomers for a credit card so they can establish a credit history, with credit up to $15k
• Ability to purchase a new vehicle with only 10% down

• 10 free equity trades when you invest a minimum of $1,000 in a new Scotia iTRADE account
• Specialized mortgages with competitive rates for newcomers who will be permanent residents

In addition, those who are not yet on Canadian soil can open an International Account with Scotiabank that allows them to move up to $50,000 into the country ahead of time.

CIBC Newcomer Offers

CIBC is another major bank that offers accessible financial products; their exact offerings change over time, but currently, those who have newly landed in the country can obtain:

• CIBC Smart Account, which provides digital banking, unlimited Interac e-Transfers, and free transfers to more than 120 countries
• A CIBC Credit Card with a $15,000 limit, with no secured deposit required
• CIBC Visa Debit Card with no monthly fee for up to 24 months, plus $350 after you open a CIBC Smart Account for Newcomers
• 3 specialized mortgage programs for newcomers and foreign workers

RBC Newcomers Offers

RBC has a similar set of products and loans for immigrants, including:

• Up to 12% cash back on a new RBC Cash Back Mastercard for the first 3 months
• Up to a $15,000 credit card Limit
• No-monthly-fee banking for a year

• Support in your language - service is available by phone or in branch in up to 200 languages
• No-credit-history car loans
• No-credit-history mortgages

TD's New to Canada Package

Lastly, TD's financial assistance services for newcomers come in a package known as the "New to Canada" package. This includes:

• TD Unlimited Chequing Account with no monthly account fee for one year, plus $350 when you open the account, unlimited transactions and free money transfers with Interac e-Transfer

• Unsecured TD Credit Card with a credit limit of up to $15,000
• Mortgages and home equity loans even if you have no credit history

Other Types of Loans

While accessing widely available loans generally requires an established history of credit or employment in the country, there are still some mainstream options for immigrants and refugees - usually from alternative lenders. These come in a few different forms, discussed below.

Personal Loans

Lines of Credit

Credit Cards

Mortgages

Car Loans

How To Qualify for a Loan in Canada

All lenders in Canada have their own eligibility requirements, with some holding strict criteria, and others with looser rules or catering to a specific demographic (e.g. those with bad credit). However, regardless of what type of loan you apply for, you can expect to have your details examined in these key areas:

• Employment and income
• Credit history
• Residency

• Amount and types of debt held
• Assets

Building Your Credit History in Canada

Immigrants arrive in Canada with an average of $47,000 in savings, of which $20,000 is left after the expense of getting settled. 19% of new immigrants have no savings at all when they arrive.

1. Open a Bank Account

This is an easy place to start as more likely than not, you'll need a Canadian bank account for your new life anyway. Having a bank account does not itself affect your credit score, but once you open a bank account in Canada, you will be registered as a Canadian consumer and credit bureaus will open a fresh credit file for you.

2. Consider a Credit Builder Loan or Product

There are many low risk and accessible credit products that will help you build a positive credit profile. A secured or low-credit credit card is one; affordable loans for immigrants and loans for skilled immigrants are also good options.

3. Set Up A Cell Phone Account

By signing up to a new cell phone plan in Canada and paying all of your bills on time, you'll help your credit. This is because cell phone providers report your financial activity to the credit bureaus.

4. Pay Your Bills on Time

As with loans and cell phones mentioned above, paying your other bills on time matters. Utilities, rent, bank charges, and so on - making a late payment or missing a payment can have a serious negative effect on your credit score, so staying on top of this is crucial to building long-term credit worthiness.

5. Pay Attention to Your Savings and Income

66% of immigrants send money home to friends and family - 17% do so monthly, and 24% do so a few times a year; the average amount sent is $2,300.

Frequently Asked Questions About Loans For Immigrants and Newcomers In Canada

Are there affordable loans for immigrants in Canada?

Where can I get a loan as an immigrant?

Can newcomers get a credit card in Canada?

Are there loans for immigrants to help with career development once in Canada?

Can newcomers qualify for affordable loans to buy property once in Canada?

Does the government provide financial assistance to skilled immigrants?

Can I get a loan without PR in Canada?